KALYANI FORGE LIMITED
ANNUAL REPORT 2011-2012
AUDITOR`S REPORT
TO
THE MEMBERS OF
KALYANI FORGE LIMITED
1. We have audited the attached balance sheet of KALYANI FORGE LIMITED as
at 31st March, 2012 and the Statement of profit and loss and cash flow
statement of the company for the period ended as on that date, annexed
thereto. These financial statements are the responsibility of the Company`s
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
2. We have conducted our audit in accordance with auditing standards
generally accepted in India. These Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion
3. As required by the Companies (Auditor`s Report) Order, 2003 [as amended
by Companies(Auditor`s Report) (Amendment)Order, 2004] issued by the
Central Government of India in terms of sub-section (4A) of section 227 of
the Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraph 4 and 5 of the said Order to the extent
applicable.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) We have obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purpose of our audit;
(ii) In our opinion proper books of accounts as required by law have been
kept by the company so far as appears from our examination of such books;
(iii) The Balance Sheet, the Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
accounts;
(iv) In our opinion, the Balance Sheet, the statement of Profit and Loss
and Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
(v) on the basis of the written representations received from the directors
as on 31st March 2012, and taken on record by the board of directors, we
report that none of the directors is disqualified as on 31st March 2012
from being appointed as a director in terms of clause (g) of sub-section
(1) of section 274 of the companies Act, 1956;
(vi) In our opinion and to the best of our information and according to the
explanations given to us, the accounts, read together with the notes
thereon, give the information required by the Companies Act, 1956 in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) In the case of the balance sheet, of the state of affairs of the
company as at 31st March 2012;
(b) In the case of the statement of Profit and Loss of the Profit for the
year ended on that date;
(c) In the case of the Cash Flow Statement, of the Cash flows for the year
ended on that date.
For M/S P.G. BHAGWAT
Chartered Accountants
Firm Reg. No.: 101118W
Nachiket Deo
Place: Pune Partner
Date : 25th May, 2012. Member ship No.: 117695
ANNEXURE TO AUDITORS` REPORT:
Referred to in paragraph 3 of our report of even date:
(i) (a) The company has maintained proper records showing full particulars
of fixed assets including quantitative details and situation of fixed
assets.
(b) The fixed assets have been physically verified by the management at
reasonable intervals with regard to size of the company and nature of its
assets. Pursuant to the program a portion of the fixed assets has been
physically verified by the management during the year and no significant
material discrepancies between the book records and physical inventory have
been noticed.
(c) According to the information & explanation given to us, the company has
not disposed off major part of fixed assets during the year.
(ii) (a) The management has conducted physical verification of inventory at
reasonable intervals. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. As informed to
us, the discrepancies noticed on verification between physical stock and
book records were not material.
(iii) (a) The Company has not granted any loans secured or unsecured to
companies, firms or other parties covered in the register maintained as per
section 301 of the Companies Act, 1956. Accordingly, the provisions of
clause 4 (iii) (b) (c) and (d) are not applicable to the company
(b) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained as per
section 301 of the Companies Act, 1956. Accordingly, the provisions of
clause 4 (iii) (f) and (g) are not applicable to the company
(iv) In our opinion and according to the information and explanations given
to us and the results of the internal audit, there are internal systems
commensurate with the size of the company and the nature of its business
for the purchase of the inventory, fixed assets and for the sale of the
goods and services. However, the same are required to be strengthen in view
of increasing complexities in the operating environment.
(v) (a) According to the information and explanations given to us, we are
of the opinion that the particulars of contracts or arrangements referred
to in section 301 of the Act have been entered in the register required to
be maintained under that section; and
(b) According to the information and explanations given to us, the
transactions made in pursuance of such contracts or arrangements and
exceeding the value of Rs. five lakhs in respect of any party during the
year have been made at the prices which are reasonable having regard to the
prevailing market prices at the relevant time.
(vi) As informed to us, the Company has not accepted any deposit from
public.
(vii) On the basis of Internal Audit Reports broadly reviewed by us, we are
of the opinion that the company has an internal audit system commensurate
with the size and nature of its business.
(viii) We have broadly reviewed the books of account relating to materials,
labor and other items of cost maintained by the company pursuant to the
rules made by the Central Government for the maintenance of cost records
under section 209 (1) (d) of the Companies Act, 1956 and we are of opinion
that prima facie the prescribed accounts and records have been made and
maintained. We have not however made a detailed examination of records with
a view to determine whether they are accurate and complete.
(ix) (a) According to the information and explanations given to us and the
records of the company examined by us, the company is generally regular in
depositing with appropriate authorities undisputed statutory dues including
income tax, sales tax, wealth tax, service tax, custom duty, excise duty,
cess and other material statutory dues applicable to it.
According to information and explanation given to us, no undisputed amounts
payable in respect of statutory dues were in arrears, as at 31st March 2012
for a period of more than six months from the date they became payable.
(b) According to information and explanation given to us, the particulars
of dues of income tax, sales tax, wealth tax, service tax, custom duty,
excise duty and cess which have not been deposited on account of a dispute,
are as follows:
Name of the Period to Amount under Forum where
statute & Nature which the dispute not the dispute
of dispute due amount deposited pending
related (Rs.)
Income Tax
Disallowance of (AY) 1992-1993 6,95,976.00 High Court, Mumbai
expenditure on
expansion of project.
Disallowance u/s 80 (IB) 2004-2005 16,82,843.00 ITAT,Pune
Disallowance of 2006-2007 15,88,820.00 ITAT,Pune
travelling expenditure
and disallowance in
respect of Stock
difference.
Disallowance of dies cost, 2009-2010 70,68,150.00 CIT (A),Pune
Loss on options settled,
expenditure of exempted
income, Stock difference,
commission to directors
etc.
Excise Duty
CENVAT credit on From 971424.00 High Court,
rejection from 2000-01 Mumbai &
to 2011-12 customer. Deputy
Commissioner of
Central Excise,
Pune.
Interest demanded 2003-04 20,000.00 Tribunal
under rule 11AA.
CENVAT Credit From 11,28,985.00 Additional
on GTA 2004-05
to 2007-08 Commissioner Pune
From
Interest on 2001-02 4,25,113.00 High Court
Supplementary to 2004-05 Mumbai
Invoices
(x) The Company has no accumulated losses as at 31st March, 2012. The
Company has not incurred cash losses during the financial year and in the
immediately preceding financial year.
(xi) In our opinion and according to information and explanation given to
us, the Company has not defaulted in repayment of dues to a financial
institution or bank.
(xii) According to information and explanation given to us, the Company has
not granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities. Accordingly, the provision of
clause 4 (xii) of the Companies (Auditor`s Report) Order, 2003 are not
applicable to the company.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Accordingly, the provisions of clause 4 (xiii) of the
Companies (Auditor`s Report) Order, 2003 are not applicable to the company.
(xiv) In our opinion, the company has maintained proper records of
transactions and contracts relating to dealing in shares, securities,
debentures and other investments during the year and timely entries have
been made therein. All the investments are held by the company in its own
name except to the extent of the exemption granted under sec. 49 of the
Act.
(xv) In our opinion and according to the information and explanations given
to us, the company has not given any guarantee for loans taken by others
from banks or financial institutions during the year.
(xvi) In our opinion and according to information and explanations given to
us, on overall basis the term loans have been applied for the purpose for
which they were raised.
(xvii) According to information and explanation given to us, we report that
no funds raised on short-term basis have been used for long-term
investment.
(xviii) According to information and explanation given to us, the company
has not made any preferential allotment of any shares to parties and
companies covered under Section 301 of the Companies Act, 1956.
(xix) According to information and explanation given to us, the company has
not issued any debentures. Accordingly, the provisions of clause 4 (xix) of
the Companies (Auditor`s Report) Order, 2003 are not applicable to the
company.
(xx) According to information and explanation given to us, the company has
not made any public issue to raise money. Accordingly, the provisions of
clause 4 (xx) of the Companies (Auditor`s Report) Order, 2003 are not
applicable to the company.
(xxi) According to information and explanation given to us, no fraud on or
by the Company has been noticed or reported during the course of our audit.
For M/S P.G. BHAGWAT
Chartered Accountants
Firm Reg. No.: 101118W
Nachiket Deo
Place: Pune Partner
Date : 25th May, 2012. Member ship No.: 117695 |